Download This PaperThe Depression of 1873-1879: An Austrian Perspective
The Quarterly Journal of Austrian Economics, 17(4):474-509
38 Pages Posted: 3 Nov 2014 Last revised: 25 Mar 2015
Date Written: February 12, 2015
Abstract
This paper analyzes the period 1867-79 in American economic history from an "Austrian" perspective. The post-Civil War boom, the Panic of 1873, and the subsequent downturn are investigated in light of Austrian Business Cycle Theory (ABCT) and its structure of production framework. This paper shows how recent legislation allowed for monetary inflation and a boom to develop that inevitably turned into a bust. However, since the federal government pursued a policy of relative laissez faire, the economy successfully recovered. Consequently, there was no prolonged depression in the 1870s.
Keywords: Panic of 1873, Austrian Business Cycle Theory, Depression of 1873-79, National Banking System
JEL Classification: E02, E03, E04, N01, N02
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